UAE participates in the opening of Asian Infrastructure Investment Bank in China

Sri Lanka’s return to seeking China’s financial assistance was further highlighted yesterday by Finance Minister Ravi Karunanayake taking part in the opening of the Asian Investment Infrastructure Bank in Beijing by President Xi Jinping, an initiative by China to rival the World Bank, IMF and the ADB.

With authorised capital of US$100 billion and subscribed capital of US$50 billion, Beijing-based AIIB will invest in sectors including energy, transportation, urban construction and logistics as well as education and healthcare. Indonesia’s finance minister, Bambang Brodjonegoro, and Germany’s state secretary in the finance ministry, Thomas Steffen, were chosen as vice chairmen, Lou said.

The Maldives was a founder member of the bank at the time President Abdulla Yameen Abdul Gayoom had ratified the parliament’s approval for the island nation to become an AIIB member. Chinese shares have slumped into a bear market, wiping out gains from an unprecedented state rescue campaign a year ago as investors lose confidence in government efforts to manage the country’s markets and economy.

Launching the China-led bank here yesterday, Chinese President Xi Jinping said this proved China’s willingness to shoulder more worldwide responsibility and “push for the perfection of the global system”. Japan, Asia’s second-largest economy, did not participate in the China-led agency.

President Xi reflected an upbeat mood in his opening address to the AIIB’s first Board of Governors meeting on January 16.

Minister Ishaq Dar also spoke about the China-Pakistan Economic Corridor and its potential to transform the entire region.

The election of India to board of directors of the AIIB is expected to provide significant role for it as it is the forum that approves the loans for projects. While China has been unhappy for sometime with the voting rights regime at the WB and International Monetary Fund, developing countries have regularly raised concerns about the western powers, U.S.in particular, using these banks for political purposes. The NDB is headed by eminent banker K V Kamath.

Xi expected the China-initiated institution and other existing multilateral development banks to complement each other for mutual strength and cooperate on joint financing, knowledge sharing and capacity building.

The AIIB is headquartered in Beijing and its lean structure will be overseen by an unpaid, non-resident board of directors which, architects say, would save it money and friction in decision-making.